Microsoft and Xiaomi to collaborate on AI, cloud computing and hardware

After Microsoft signed a deal to test Windows 10 on Xiaomi devices in 2015 and then Xiaomi bought a trove of patents to help run other Microsoft services on its devices in 2016, today the two companies announced another chapter in its collaboration. Xiaomi and Microsoft have signed a Strategic Framework Memorandum of Understanding (MoU) to work more closely in the areas of cloud computing, AI (including Microsoft’s Cortana business) and hardware.

To date, Xiaomi has largely focused its mobile phone strategy in Asia Pacific, where Gartner revealed yesterday that it (and Huawei) were the only two vendors to increase their market shares at a time of general decline. This deal could point to how Xiaomi is looking to raise its game in the West, specifically in the US.

On the side of Microsoft, it’s particularly interesting given that the company has largely pulled back on a lot of its hardware efforts, and has visibly had some major stumbles in this area especially in mobile — most recently with its failure to take on and grow the Nokia mobile business and Windows Mobile.

Understanding that mobile isn’t an area that Microsoft can quite step away from altogether (“I just can’t quite Zune”, “Too much too Zune!” quipped two of my very funny TC colleagues), it seems that the company is going to have one more go now on with a different partner (one that is still on the rise) and a different approach.

“Xiaomi is one of the most innovative companies in China, and it is becoming increasingly popular in various markets around the world,” said Harry Shum, EVP of Microsoft’s Artificial Intelligence and Research Group, in a statement. “Microsoft’s unique strengths and experience in AI, as well as our products like Azure, will enable Xiaomi to develop more cutting-edge technology for everyone around the world.”

“Microsoft has been a great partner and we are delighted to see both companies deepening this relationship with this strategic MoU,” Wang Xiang, Global Senior Vice President and Head of International Business, Xiaomi, added in his statement. “Xiaomi’s mission is to deliver innovation to everyone around the world. By collaborating with Microsoft on multiple technology areas, Xiaomi will accelerate our pace to bring more exciting products and services to our users. At the same time, this partnership would allow Microsoft to reach more users around the world who are using Xiaomi products.”

The deal covers four major areas of services for the two companies.

Cloud support will include Xiaomi using Microsoft Azure for data storage, bandwidth and computing and other cloud services. Meanwhile, Xiaomi’s efforts in laptops and “laptop-style devices” that run Windows will be co-marketed by Microsoft. Then Microsoft is also going to be talking with Xiaomi on how to improve collaboration on AI-powered speakers using Cortana.

That appears to be just the start for the company’s AI collaborations. They also “intend to explore multiple cooperative projects based on a broad range of Microsoft AI technologies, such as Computer Vision, Speech, Natural Language Processing, Text Input, Conversational AI, Knowledge Graph and Search, as well as related Microsoft AI products and services, such as Bing, Edge, Cortana, XiaoIce, SwiftKey, Translator, Pix, Cognitive Services and Skype,” Microsoft said in a statement.

No financial terms to the arrangement are being given but we are asking.